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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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Cox On Comp
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Posted by: Jack Ciesielski 3/31/2006 8:34 AM
Check out Chairman Chris Cox's speech given yesterday at a Council of Institutional Investors confab in Washington.

Cox draws the comparison between the pay for athletes and entertainers and the pay for executives, and articulates very well the major difference between the way the two compensation sets are derived. The pay level for athletes and entertainers is based based on negotiation and their own popularity. The pay level for executives, however, can be influenced by them: they negotiate with their own board of directors, who are very likely to be executives themselves. They aren't negotiating with the shareholders who actually own the company, but depend on a board to represent their interests. And a good deal of intensity gets lost in that intermediation.

We'll see if the SEC's plans for compensation disclosure improve that bargaining process for shareholders - or just provides more fodder for the compensation consultants.
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